VENEZUELA’S “BOLIVARIAN Revolution” is moving ahead fast. President Hugo Chávez’s government, which began in 1999 with an attempt to implement Tony Blair’s “third way,” now aims to build “socialism for the twenty-first century.” Revenues from the state oil company, PDVSA, have funded vast increases in social spending. Targeted outreach to the poor via government “missions” have largely bypassed the old state structures and have achieved spectacular results.

These include a reduction of poverty from 55 percent of the population to 34 percent as the share of gross domestic product (GDP) on social spending has increased from 7.83 percent to 14.69 percent; the achievement of literacy for 1.5 million adults; the virtual elimination of hunger through subsidized grocery stores that service 13 million people; medical care provided by Cuban doctors via free clinics in slums, reaching 18 million people, nearly 70 percent of the population; access to higher education for the poor and working class; and special affirmative action programs for indigenous people.1The minimum wage is now the highest in Latin America at $286 per month, and the workweek is to be shortened from forty to thirty-six hours by 2010.2 Land reform has shifted 8.8 million acres to impoverished families, more than half of that from private owners.3 Government seed money has increased the number of cooperative enterprises from fewer than 800 to 181,000 to try and provide more stable employment for the approximately half of Venezuelan workers who toil in the informal sector of the economy.4

All this is being achieved despite the implacable hostility of Venezuelan capital and of U.S. imperialism, which supported the failed 2002 coup against Chávez, and the subsequent oil industry employers’ lockout that did enormous economic damage. If the 2002 coup government—immediately recognized by George W. Bush’s administration—had been successful, Hugo Chávez would have been just another in a long list of reformist Latin American leaders who were overthrown by the U.S. or its local operatives in a roster of interventions that stretches from the Mexican War of 1846 to the Contra war against the Nicaraguan revolution in the 1980s. Instead, Chávez looms ever larger on the world stage, having turned Venezuela from one of the most compliant states in Washington’s “backyard” into the cutting edge of the revolt against neoliberalism and a laboratory for socialism in the twenty-first century—all with oil money earned from exports to the United States. Oil prices are high, of course, owing to the Iraq War, which has also severely constrained the ability of the U.S. to contain Chávez, let alone overthrow him.

As a consequence, millions of workers in Latin America and beyond see Venezuela as evidence that reforms are possible despite corporate globalization and imperialism—and they’re discussing the possibility of a socialist future as well. Chávez’s Venezuela challenges Margaret Thatcher’s famous dictum, adopted by neoliberal policymakers everywhere: “There is no alternative”—TINA. Venezuela is increasingly seen as proof that TINA, if not dead, is certainly suffering from a crisis of legitimacy. Not only has Venezuela begun to reverse decades of what is known in Latin America as “social exclusion,” but the oil boom has facilitated regional economic integration and anti-U.S. diplomatic initiatives that are giving shape to Chávez’s aim of achieving pan-Latin American, anti-neoliberal unity.5Latin America has seen other populist leaders with a base among the working class and the poor, but rarely with such an immediate international impact.

These changes powered Chávez’s reelection in December 2006 over conservative Manuel Rosales, a state governor notorious for having signed the coup decree of April 2002.6The opposition’s lackluster campaign ensured that Chávez’s victory would be the biggest yet, with 60 percent of the vote. Afterward, Chávez declared a new phase in what Venezuelans call the “revolutionary process”—the nationalization of sectors of the oil industry that were still in the hands of foreign investors. This move followed the re-nationalization of the telephone company, CANTV, and other companies. Parallel to these nationalizations—carried out by presidential decree following authorization by the National Assembly—are far-reaching efforts to create new political structures, including communal councils and workers’ councils that are presented as cornerstones of the “protagonist” democracy that Chávez has long championed. Earlier, Chávez had marked his reelection with a call to create a United Socialist Party of Venezuela (PSUV), and later denounced parties previously part of his electoral and government coalition for refusing or hesitating to dissolve within it.7

With this turn, certain contradictions in the revolutionary process have surfaced. Are the proposed workers’ councils a step towards workers’ control, or are they an effort to extend state control over organized labor, as some critics in the left wing of the pro-Chávez National Union of Workers (UNT) have argued? Is the PSUV a means to bind Chávez more directly to the mass of workers and the poor, and bypass unresponsive and/or corrupt bureaucrats, as its promoters claim, or is it a move to co-opt and bureaucratize the social movements themselves, as some leading movement activists have argued? Will the companies that have been nationalized—through compensation to capital worth billions of dollars—be democratically run by workers or by the same managers? Is a government that has paid off $3.3 billion in loans to the International Monetary Fund (IMF) and World Bank—the odious debt of previous, corrupt regimes—prepared to carry out a consistent opposition to imperialism in all its forms? What will be the response of Chávez to attempts by unions and social movement activists to advance the “revolution within the revolution,” as the Venezuelan Left has long advocated? Or the response to strikes in state-owned companies? Class polarization is leading to sharper class conflict and political crises, for example, over inflation and the hoarding of staple foods. Will the government attempt to mediate such conflict or support workers and the poor against employers and speculators? Are Chávez’s exhortations to study revolutionary leaders of the past—most recently, Leon Trotsky—the harbinger of more radical policies? Can a government elected within the framework of a capitalist, bourgeois democratic state initiate a socialist transformation of society? Can the prestige of Chávez among workers and the poor in Latin America and beyond contribute to the revival of radical and socialist politics?

These questions are not entirely new. But until recently, the broad Chávista camp was bound together by pressure from the Venezuela Right and imperialism. Tensions, for example, had bubbled up among government supporters over the highhanded way government officials ran Chávez’s campaign in the recall election of 2004.8But positions didn’t crystallize, given the perceived threat of an electoral victory by the Right or another coup. Moreover, rapid economic growth—more than 10 percent annually since 2003, has nearly cut in half what had been a 20 percent unemployment rate, ameliorating conditions for workers but simultaneously aggravating class polarization. Consequently, sharp political debates in Venezuela are emerging within the Left itself in response to Chávez’s new initiatives. The Right remains a threat, however, as evidenced by the violent protests (which are ongoing as the ISR goes to press) after the government failed to renew the broadcast license of an opposition television station that had allowed active military generals to broadcast calls for the government to be overthrown during the coup attempt.

Where is Venezuela going? This article seeks to provide a framework for answering that question. It will (1) analyze the rise of Chávez within the context of Venezuelan history and politics; (2) examine the government’s economic, social, and political policies; (3) evaluate the Venezuelan revolutionary process from the standpoint of classical Marxist theory; and (4) outline a strategic approach towards the Chávez phenomenon for those committed to anti-imperialist and revolutionary socialist politics.

From the “Venezuelan dream” to economic catastrophe
Venezuela was long considered perhaps the least likely country in Latin America to become an international reference point for revolutionary and socialist politics. The fall of the military dictatorship of General Pérez Jiménez in 1958 was followed by a political power-sharing deal between the nominally center-left Democratic Action party (AD) and the conservative Christian Democratic party (COPEI). Known as the “Punto Fijo” system, named after the house of then-presidential candidate Rafael Caldera where the pact was brokered, the agreement created a duopoly that excluded the Communist Party (PCV), then dominant in organized labor.9The communists were also expelled from the Confederation of Venezuelan Labor (CTV), which was soon dominated by the AD and became a vehicle for U.S. imperialism to subvert organized labor across Latin America.10

For decades, the CTV and the puntofijismo political duopoly seemed impervious to challenge from the Left. Since voting for the National Assembly was done by party slate rather than individual candidates, and state governors were appointed, it was almost impossible for individuals or parties outside AD and COPEI to win elections. When threats did emerge, outright fraud ensured that the two parties would retain their grip on power.11 “Acta mata voto”—the tally sheet kills the vote—became the duopoly’s unofficial slogan.

Locked out of elected office and influence in the unions, the Left struggled to make an impact. Unions tied to the PCV formed a separate labor federation that remained small and had only limited influence. A generation of young militants influenced by the Cuban Revolution—mostly young, middle-class radicals—broke away from the PCV and took up armed struggle in the 1960s, but made little headway. The guerrilla actions were used as a pretext for state repression against student radicals and labor militants.12By the 1970s, however, the Left had partially recovered. A breakaway from the PCV, the Movement Toward Socialism (MAS) reoriented from guerrilla struggle to an electoral strategy.13 In the center of heavy industry in the Bolívar state, a radical union movement led by ex-communists gave rise to the Radical Cause party (La Causa Radical).14 Elements of both would later break away to join Chávez’s electoral coalition.

The 1976 nationalization of the oil industry by the AD government of President Carlos Andrés Pérez was the high watermark of puntofijismo and nationalist economic development, as the U.S. defeat in Vietnam forced Washington to give Caracas a longer leash.15Venezuela seemed poised to reach a qualitatively higher stage of development than its neighbors.

The Latin American debt crisis of 1982–83 and a dramatic fall in world oil prices shattered the Venezuelan dream. The debt used to finance Pérez’s nationalist development plans couldn’t be repaid. In 1970, Venezuela’s long-term debt had been only 8.7 percent of GDP. By 1985, it was 46.1 percent.16Subsequent governments turned to the IMF for emergency loans, contingent, as usual, on “structural adjustment” and austerity. The heady days of high growth and expansive plans for economic development suddenly gave way to endless crisis. Debt—and the succeeding IMF loans—strangled many Latin American economies during what became known as the “lost decade” of the 1980s. The income share of the poorest 40 percent of the population dropped from 19.1 percent in 1981 to 14.7 percent in 1997, while the wealthiest 10 percent increased their share of the national income from 21.8 to 32.8 percent.17 “During the 1980s and 1990s, no South American country deteriorated more than Venezuela; its GDP fell some 40 percent.”18

The social explosion, known as the Caracazo, finally came on February 27, 1989, when riots erupted in Caracas against a dramatic increase in bus fares, driven by fuel costs, and by the massive hoarding by supermarkets in anticipation that the government would authorize price increases in regulated food items. The AD government of Carlos Andrés Pérez—who had been returned to office on a populist platform, only to embrace new IMF “adjustments”—ordered the military to clear the streets. Thousands were killed by the repression.19A state that had been held up as the model for Latin American democracy turned out to be as vicious as any.

Neoliberal policies, combined with low oil prices, took a terrible toll on the Venezuelan working class. Real wages dropped 23 percent during the 1990s, and 60 percent of the population was forced to turn to the informal sector of the economy to survive.20Poverty rates skyrocketed, reaching, according to one estimate, 66.5 percent in 1989.21

The duopoly responded to rising social polarization by trying to let off steam in the political arena. A series of reforms under an AD government allowed a vote for individuals to the National Assembly and in 1989, the first direct elections for governor in Venezuelan history.22

The Left, it seemed, finally had an opening to consolidate its influence. Thus in 1989, when the first-ever direct elections for governor were held, Causa Radical won the post in the industrial state of Guyana, and MAS made gains in the National Assembly.23Yet opportunity coincided with crisis: 1989 was the year not only of the Caracazo and electoral reform, but also the year the Berlin Wall was torn down. The collapse of Stalinism in Eastern Europe and in Russia disoriented not only pro-USSR parties like the PCV but also Maoist and Trotskyist groups. Thus the Left, seemingly poised to exploit political reforms and intervene in social struggles in the aftermath of the Caracazo, fragmented instead. Indeed, the rise of Chávez must be seen in part as a consequence of the weakness of the Venezuelan Left.

Enter Chávez
Lieutenant Colonel Hugo Chávez burst onto the scene on February 4, 1992, in a failed coup against Pérez. His plan called for seizing key government and military installations and radio transmitters, through which his group would call for a national uprising. The plan echoed the 1945 coup and AD-military junta that overthrew the military dictatorship of Isaías Medina Angarita. But unlike the AD party of that time, Chávez’s conspirators had almost no contact with social movements, organized labor, or the Left.24The apparent hope was a repeat of the Caracazo uprising, this time with the military on the side of the people.
Betrayed by spies, the coup failed. Chávez went on television to urge his forces to surrender—“for now”—and was sent to a military prison. Large numbers of Venezuelans saw Chávez not as a would-be dictator but as a hero—a point made by former president Rafael Caldera on the floor of the Senate. Caldera adapted to the Chávez phenomenon by breaking from his COPEI party to win reelection as an independent on a populist platform in 1993. Once in office, he pardoned Chávez, reprising a move he made in his first term in 1969 when he pardoned former guerrilla fighters. But like Carlos Andrés Pérez, Caldera soon abandoned his populist rhetoric and implemented IMF-approved economic policies. It was in this context that Chávez turned towards the electoral road to power. AD and COPEI were discredited as corrupt accomplices of the IMF, while political reform had made the strategy of seeking office viable.

Chávez’s only organization had been his once-secret circle of military conspirators, the Revolutionary Bolivarian Movement-200 (MBR-200, the number signifying the bicentenary of Simón Bolivar’s birth), founded in 1983. The MBR-200 took root among a generation of officers who had no experience of counterinsurgency measures against the left-wing guerrillas of the 1960s. Rather, they were the beneficiaries of a new, university-level training system created at the height of the 1970s oil boom and salaries that were the highest for officers in the Western Hemisphere, after the U.S. and Canada. The training “reinforced nationalist patriotic sentiments among officer cadets after 1974,” writes one researcher. “Some developed an almost mystical attachment to the teachings of Simón Bolivar, and many shared a populist, egalitarian and ultimately utilitarian attitude toward democracy.”25

These young officers considered themselves superior to the less educated high-ranking officers, who were enmeshed in AD-COPEI corruption. The economic shocks of the 1980s, however, shattered the Venezuelan military officers’ world, cutting their living standard from that of the upper middle class to the working class. Many looked askance at Pérez, whose “sale of state industries and the national telecommunications company to foreign investors, were viewed as damaging to national sovereignty by many officers still influenced by a belief system that equated security with state control of ‘strategic industrial sectors.’” On top of all this was revulsion at the military’s role in shooting down poor rioters in the Caracazo.26

Less discussed is the extent to which Chávez’s politics draw upon nationalist traditions within the Venezuelan military itself. As in many Latin American countries in the nineteenth century, Venezuela was divided by civil wars between urban bourgeois liberals and rural conservative landowners. In Venezuela, the conflicts escalated to the point where there was barely a functional central state. Chávez is sometimes compared to the populist figures from this era, such as Ezequiel Zamora, the liberal caudillo “horror of the oligarchy” assassinated in 1860.

Chávez’s politics, in fact, echo broader nationalist—and not particularly left-wing—traditions of the Venezuelan military, for example, that of General Cipriano Castro, an admirer of Bolívar, who seized power in 1899 and formed an assertively nationalist government. U.S. President Theodore Roosevelt called the dark-skinned Castro “an unspeakably villainous little monkey” and plotted a possible invasion. An intervention did take place, but privately: the U.S. asphalt trust financed an invasion by a rival general. Castro prevailed, and survived gunboat diplomacy when Italy, Britain, and Germany sent naval ships to the Venezuelan coast in 1902, with Germans opening fire. Ultimately Castro accepted the U.S. as a broker for the repayment of the debt.27
The subsequent dictatorship of Juan Vicente Gómez—who ousted Castro—paid off the debt by 1930 and collaborated with U.S. oil companies to boost Venezuelan oil production, mainly as a counterweight to Mexican President Lázaro Cardenas’s nationalization of his country’s oil industry.28 But in a development that presaged Chávez’s MBR-200 military conspiracy, a section of more nationalist-minded junior officers led by Major Marcos Pérez Jiménez allied with the AD party in a populist junta that ousted General Isaías Medina Anagrita to initiate the democratic trienno of 1945–48. Anticipating the MBR-200, Pérez Jiménez’s circle considered itself “a movement of political and military renovation” that sought not military rule but to serve “as a mere instrument to bring into being a new government comprised of patriotic, able, and honest men who were backed by popular opinion.”29 Pérez Jiménez turned on his civilian allies three years later and installed himself as dictator-president for a decade. Yet while a reliable guarantor of U.S. oil interests, Pérez Jiménez carried out a planned, nationalist economic development program—laying the basis for state-owned steel and aluminum industries, for example—a program Chávez would later seek to revive and democratize.30

There is another strong military influence on Chávez as well: the populist government of General Juan Velasco Alvarado in Peru, who took power in a military coup in 1968 and held the post of president until 1975. In a process described by one author as “revolution by decree,” Velasco took advantage of a commodities boom to nationalize key Peruvian industries, including mining, transportation, communications, electrical power, and more. An aggressive land reform policy handed out small parcels to poor peasants, breaking up the great latifundia landholdings with minimal compensation to the owners. Velasco’s quasi-governmental National System for Social Mobilization and state-initiated organizations of workers and peasants prefigured Venezuela’s social missions of today. This attempt at revolution from above—including “social property” and “workers’ self-management,” unraveled amid the 1974–75 world recession. The prices of Peruvian exports plunged, leading to social discontent, a revolt by police, and splits in the junta, which forced Velasco from power.31

Yet to the young Hugo Chávez, sent to Peru as part of a military-diplomatic mission, the Velasco experience showed the potential for a military alliance with “the people,” in contrast to the right-wing dictatorships in Chile, Argentina, and Brazil that slaughtered leftists and union militants. Chávez was able to meet Velasco, who gave the young Venezuelan officer a copy of his small book on his “Peruvian revolution.” Chávez would carry the book in his shoulder bag until the day of his 1992 coup attempt.32

Chávez continues to sound the theme of a revolutionary civic-military partnership. In a June 2 address to half a million at a mass rally against the violence from the Right, Chávez devoted a large part of his speech to commemorating the anniversary of one of two failed 1962 military revolts led by officers with leftist sympathies. In a speech otherwise full of references to building socialism, Chávez hailed the “civic, military, patriotic, and revolutionary” uprising against the “treason” of the Punto Fijo pact, adding, “By that road we came, and by that road we arrived at February 4”—that is, the 1992 coup.33One need not doubt the sincerity of Chávez’s commitment to communal councils and “protagonist” democracy to conclude that the Venezuelan leader accords a leading, if not decisive, role in political change to patriotic and nationalist elements in the armed forces.

The 1992 coup’s failure, however, compelled Chávez to forge political relationships with civilians. While imprisoned, his contacts with the Venezuelan Left broadened, and included former guerrilla fighters, trade unionists, and politicians to the left of the AD. After his pardon by Caldera, he traveled to Havana to speak and meet with Fidel Castro and the Cuban leadership.34By 1998 he was a credible presidential candidate, as the AD-COPEI duopoly had reached its terminal crisis. Caldera had won presidential elections in 1993 on a populist basis, breaking from his own COPEI party, and pardoned Chávez as a symbol of reconciliation with those who suffered in the economic decline. In short order, though, he embraced a new IMF austerity package.35 It is difficult to overstate the resulting crisis of legitimacy of the Venezuelan political system.

Chávez won election with 56.2 percent of the vote in December 1998, the highest percentage of a presidential winner in decades. While he sounded themes of social justice and nationalism, his central platform was a call for political reform through a constituent assembly to write a new constitution to replace that of the so-called fourth republic of the Punto Fijo accord. Chávez’s electoral vehicle, the Fifth Republic Movement (MVR) was small and lacked roots; it relied on a coalition initially drawn from a split from Causa Radical called Patria Para Todos and MAS (which would later split itself).36This lack of a political party of working class and the poor that Chávez aspired to represent has been a persistent problem for his political project—and as we shall see on the debate over Chávez’s proposed unified socialist party, the problem persists nearly a decade later.

Once in office in 1999, Chávez was besieged with the effects of the economic crisis—the economy contracted by 7.2 percent, and unemployment jumped from 11.4 percent to 15.4 percent. Compounding the misery, a catastrophic mudslide killed thousands. He retained Rafael Caldera’s budget-cutting finance minister in that post. Chávez’s main focus was the constituent assembly that was charged with creating a constitution that would implement political reform “while emphasizing the importance of the free market and recognizing private property.”37With the new constitution in place, Chávez ran for president again in 2000 and increased his vote while still keeping within the framework of third way economic policy. In November 2001, Chávez proposed new legislation to implement land reform, strengthen state control over the oil industry, and increase spending on social security.38 Many government economic measures, though, had the character of pragmatic, improvised interventions, such as the creation of military-civilian projects to boost economic development in poor and rural areas to supplement an increase in social spending.39 While Chávez did assert the importance of the state in economic management, particularly in regard to PDVSA, he hardly positioned himself as an anti-neoliberal rebel. Shortly after taking office in 1999, the Venezuelan president traveled to Wall Street to “assure the moneymen of the ‘credibility’ of his government and its aims of a ‘diversified’ and ‘self-sufficient’ economy,” as well as throwing the first pitch at a New York Yankees baseball game and ringing the bell at the New York Stock Exchange.40

The empire strikes back
Nevertheless, Chávez’s economic policy did antagonize Venezuelan capital—and more important, the U.S.—in one respect. Chávez moved to restore government control over the state oil company, PDVSA, and reversed Venezuela’s longstanding policy of undercutting OPEC quotas. Chávez’s moves were credited with helping to reverse the trend towards low oil prices and restore pricing clout to oil producing nations.

The incoming Bush administration soon assumed a hostile stance towards Chávez. Since the 1920s the U.S. had relied on Venezuela’s oil and had insisted on compliant governments ever since, be they military or civilian. It was only in the post–Vietnam shock of U.S. imperialism that the Venezuelan bourgeoisie felt confident enough to follow the example of nationalist governments in the Middle East and nationalize its oil industry. But this nationalist phase didn’t survive the economic shock therapy that the U.S. imposed on Venezuela via the IMF.41

Chávez’s resurgent nationalism, however, represented an obstacle to George W. Bush’s plans for a more aggressive U.S. imperial control of oil resources. A weak economy left Chávez vulnerable to pressure from Washington and the domestic Right. Sections of the middle class that had voted for him turned against the government, seeing no immediate benefit for themselves in the government’s fledgling anti-poverty programs. Meanwhile, Chávez’s coalition was fraying. Already in the 2000 election he faced a fairly strong electoral challenge from Francisco Arias Cárdenas, his former military co-conspirator in the 1992 coup attempt, and in the months before the coup Chávez couldn’t be assured of a majority in the national legislature.42

The middle-class opposition and conservative military officers were egged on by an utterly hostile corporate media that raised the specter of a Castroite communist dictatorship in Venezuela. The Venezuelan oligarchy, led by billionaire media magnates like Gustavo Cisneros, called the shots. But the oligarchy astutely relied on a handful of prominent ex-leftists and the leadership of the CTV union federation to provide a supposed progressive political cover. The CTV called the general strike and mass march that served as the launching pad for the April 11, 2002, coup attempt, which began as unknown snipers opened fire on the defenders of the Miraflores presidential palace.

United States government foreknowledge and support of the coup has been thoroughly documented. Venezuelan-American attorney Eva Golinger has used the Freedom of Information Act to publish documents that show how the government-chartered National Endowment for Democracy (NED) funneled $2 million to the Venezuelan opposition in the six months prior to the 2002 coup, and that the NED had given the AFL-CIO’s foreign policy arm more than $750,000 to support the CTV, a key opposition group.43The CIA knew of the coup beforehand, and the U.S. immediately endorsed the would-be dictator Pedro Carmona, head of the FEDECAMARAS chamber of commerce who decreed the abolition of the National Assembly and declared martial law.44
The coup collapsed because of pressure from below. Journalist Michael McCaughan describes the scene:

In the absences of any communication from the missing president “Radio Bemba,” the word-of-mouth network that carries rumor, gossip, innuendo, and hard news like a powerful breeze through Latin America’s popular barrios, suddenly sprang into action. The message carried on the wind was that Chávez had never resigned, and that the dead and injured outside Miraflores were mostly Chávez supporters. The next day, Chavistas gathered in small groups and descended from the hillsides to besiege the presidential palace demanding their leaders’ safe return…

The growing clamor of the angry crowds unnerved the “transition government,” sending generals, bishops, and business people scuttling to their cars to beat a path to the safety of their homes.45

Meanwhile, Carmona’s power grab, the “coup within a coup,” alienated the CTV leaders who had backed it and isolated within the military key sections of which rallied to Chávez and returned him to Miraflores under pressure from officers and soldiers loyal to the president.

The slums that rallied to Chávez are the same ones that had revolted against IMF austerity in 1989; Chávez had sought to call them into the streets against the old order in his attempted coup three years later. On April 11–13, 2002, the two elements fused together. The Bolivarian Revolution, however ill-defined, had shown it had won the active support of the impoverished and oppressed in a struggle against counterrevolution.

The search for revolutionary agency
The uprising against the coup seemed to vindicate the notion of a “revolutionary process” in Venezuela. But there was still relatively little organized connection between Chávez and the masses.46Various attempts had been made since 1999 to solve this problem: the constituent assembly process aimed at creating genuine “protagonist” democracy; the civic-military projects of 1999–2001; an attempt to legislate the CTV out of existence and create a new labor federation, later withdrawn; the effort to create grassroots Bolivarian Circles to form a popular counterweight to the Right.

The coup attempt posed the question of lack of political organization still more acutely—as did the lockout by top management at the PDVSA state oil company in late 2002. Supported by technicians and a section of workers tied to the CTV, the shutdown sent the Venezuelan economy into free fall. Other private employers supported the lockout as well, as shortages of gasoline and fuel oil led to widespread factory shutdowns. It was only the determined efforts of pro-Chávez oil workers who restarted production under their own control, assisted by a scattering of technical personnel rushed in from abroad and soldiers who transported gasoline. In other sectors of industry, workers kept production going in spite of management sabotage.47

While the episode was “ephemeral,” it was successful, wrote oil workers’ union leader José Bodas and two other labor militants, Richard Gallardo and José Joaquín Barreto:

The dream of workers’ control of production became flesh in Venezuela and made an indelible mark in workers’ consciousness, and managed to convince them in a matter of hours that it was not a revolutionary socialist utopian idea to expropriate to the capitalists, to control production, to plan the economy and to put the goods produced at the service of the majority…. The workers democratically chose their authorities, managers, shift leaders; distributed the working hours and began to plan the rhythms and quantities of production.48

The working class, faced with an unavoidable choice of whether to support Chávez or the CTV alliance with the oligarchy, opted for Chávez. The result was the formation in 2002 of a new labor federation, the UNT, a formation committed to the revolutionary process and led by a coalition of social Christians who split from the CTV, veteran socialist labor organizers, and Chavistas of the Bolivarian Workers Front (FBT).49

The wave of oil revenue in 2004 gave Chávez new leverage in his efforts to consolidate a mass base, providing funding for the social programs known as “missions.” Funded by huge revenues from oil exports, the missions are controlled directly by the central government in a kind of NGO-ized twist on traditional clientelism of Latin American populist governments of the past (Cárdenas in 1930s Mexico, Juan Perón in Argentina in the 1940s and 1950s). The missions enabled Chávez to bypass the state bureaucracy, still largely staffed by the opposition, and provided him with a recruiting base for cadre as a substitute for a grassroots political party organization. In this way, Chávez could begin to have a more organized relationship with the barrios that mobilized to defeat the coup at a time when his electoral operation was embattled.

“[A]ctive participation and mobilization are key components of the process,” Venezuelan labor expert Steve Ellner wrote in 2005.

Chávez has relied on more than just electoral or passive support. He has followed a strategy of ongoing popular mobilization to face his insurgent adversaries, actions that have proven essential for his political survival including his comeback after the April 2002 coup. The massive street actions in favor of the Chavista process have been made possible by the conviction among rank-and-file Chavistas that Chávez’s rhetoric is based on substance and commitment to thorough change, not manipulation.50

More recently, the Venezuelan government has provided seed money for cooperatives—worker-owned and run businesses aimed at providing stable employment for those who labor in the informal sector, which still includes nearly half the working class. The intention is to supplement the oil revenue-funded social reforms with lasting economic change and what Chávez’s economic policymakers call “endogenous economic development”—self-sustaining economic activity that can create jobs and growth without overdependence on oil revenues. The political byproduct of this effort would be the consolidation and extension of Chávez’s political base among the poor.

The analog to the cooperative initiative is the creation of communal councils, locally organized bodies that are established in parallel to existing municipal structures, and which are given grants by the state for local projects. Created under the Chávista constitution established in 2000, the councils received new emphasis following Chávez’s re-election in 2006. The ultimate aim, according to Chávez, is the replacement of existing municipal and state structures.51Just how this will work isn’t clear. “The current law presents weaknesses,” writes left-wing sociologist Margarita López Maya. “The councils are mini-governments with many tasks. Questions arise, such as, will people act through pure solidarity? Will they have enough time and desire to do so? Many people who work arrive home tired, and women in particular have a double workday. How is that to be resolved?”52
Politically—and most controversially—Chávez aims to consolidate mass participation in his project through the PSUV, which will be discussed in detail below.

Toward socialism?
In January 2005, Chávez declared himself for a “socialism of the twenty-first century” in a speech at the World Social Forum in Porto Alegre, Brazil. Sidelined on a trip to the forum two years earlier—he was forced to speak at City Hall rather than at the event itself—Chávez now emerged as the most radical voice among the Left and center-left forces that had, or would soon, take office in Argentina, Brazil, Chile, Uruguay, Bolivia, and Ecuador.

But what kind of socialism? Chávez distinguished his vision from European social democracy and the “state socialism”—really Stalinist state capitalism—of the old USSR and its Eastern European bloc. He even made a point of distinguishing his vision for Venezuela from the Cuban experience, despite his close alliance with Castro. Leaving aside for now the nature of socialism for the twenty-first century, it’s clear enough that Chávez is seeking a model of nationalist economic development directly counter to the trends of the previous three decades, when the turn toward corporate globalization, or neoliberalism, had begun.

The question is whether Chávez’s Venezuela would evolve differently from previous attempts at economic nationalism in the Third World, which also presented themselves as variants of socialism—African socialism, Arab socialism, and so on. In his recent wide-ranging history of the Third World, Vijay Prashad sums up the dilemma that faced postcolonial governments that tried to initiate socialism from above through radical reforms:

As output increased, regardless of the means to do so, the state would have a larger aggregate pool of capital and resources to distribute to the population. Market socialism or the mixed economy was a socialism of consumption not production. In the attempt to industrialize and create agricultural change, there was only a muted effort to change the relations and methods of production. The process of industrial as well as agricultural production remained similar to that found in any advanced capitalist country: workers had no say in the process of production, which was run by a detached management class. Deliberation was kept to a minimum. Socialism made its appearance in the marketplace and on the threshing floor—to more equitably divide the spoils rather than to more equitably produce them in the fist place.53

The Venezuelan government aims to avoid such an outcome by promoting what Chávez calls the “five motors toward socialism.” The first “motor” is the enabling law, called by Chávez the “mother law” of the transition to socialism.54The law, passed by the National Assembly in the weeks after Chávez’s inauguration, gave him the authority to govern by decree in specific areas. It was the enabling law that allowed Chávez to order the re-nationalization of the CANTV telecommunications company and to nationalize sectors of the oil industry still under direct foreign control.

Conservative critics, especially in the U.S., point to the decrees as evidence of dictatorship. In fact, the decrees are considerably easier to alter than George W. Bush’s unconstitutional “signing statements” appended to legislation stating which parts of laws the president will enforce. In Venezuela, the National Assembly has the opportunity to revise Chávez’s decrees, and they are subject to review by the Supreme Court.

Defenders of the measure point out that previous Venezuelan presidents have used enabling laws—including Carlos Andrés Pérez during his first presidency in the 1970s—and cite the need for rapid change. Neither argument is convincing. The nationalizations come eight years after Chávez took office, which makes the urgency claim dubious. Moreover, Chávez’s supporters have overwhelming control of the National Assembly in a government based on a constitution that many of them helped to draft. Surely the goal of participatory democracy would be furthered by a public legislative debate over such crucial issues.

A more reasonable explanation is that Chávez presents the enabling law as “the direct way to socialism” because it allows him personally to take the initiative and control the pace of political change. This is not a concession to the Chávez-as-dictator complaints of the opposition. Rather, it recognizes the contradiction of the attempt to initiate a socialist transformation from above by circumventing the layers of state bureaucracy and elected officials tied to the status quo. While the left wing of organized labor and the social movements have called for nationalization and greater transformation, Chávez’s decrees are essentially attempts to substitute for the class struggle to achieve those demands. The decrees of an individual, however, no matter how revolutionary or enlightened, can’t substitute for the self-organization of the working class, still less the workers’ democratic control that is the essence of genuine socialism.

Chávez does aim to raise political consciousness and stimulate organization. The remaining four motors to socialism are apparently intended to fuse Chávez’s leadership to a more politically educated and active population through greater participatory democracy. Thus the second motor is constitutional reform that is to involve invoking “constituent power.” The third motor is education with socialist values: “A fighter, a revolutionary, has to study every day of his life, every night of his life, has to study theory and practice to navigate in the waters of the dialectic,” Chávez declared. The fourth motor is a “new geometry of power”—essentially the redrawing of Venezuela’s internal political boundaries to overcome imbalances of population density, wealth, and political clout. “If we don’t have the capacity to demolish the old customs, the odious differences of class, the obscene privileges, and generate a new culture of equality, of solidarity, of brotherhood, we’ll lose the moment,” Chávez said following his reelection. “But we’re not going to lose the moment. We’re going to achieve this!”

The fifth motor of the revolution is an “explosion of communal power: Protagonist, revolutionary, and socialist democracy.” The aim is to create self-organized communal councils that will develop to replace existing municipalities, and eventually, “at the national level, a confederation of communal councils,” Chávez said. It is necessary, he declared, to “dismantle the bourgeois state” because all states “were born to prevent revolutions.” The Venezuelan state, he said, must cease to be a “counterrevolutionary state” and become a “revolutionary state.”55

Yet no revolutionary state that attempts to build socialism can coexist with capitalism indefinitely, particularly in smaller countries historically dominated by imperialism. Chávez seeks to expropriate the bourgeoisie politically by excluding it from state power and its dominance in the media (for example, through the government’s refusal to renew the broadcast license of the RCTV channel because of its aggressive support for the opposition). Yet such a change will ultimately be superficial unless the class relations that gave rise to that state are also overturned. Nationalizing industries isn’t equivalent to socialism—a point Karl Marx and Frederick Engels always insisted upon. After the conservative German leader Otto von Bismarck “went in for state ownership of industrial establishments, a kind of spurious Socialism has arisen,” Engels complains, “degenerating, now and again, into something of flunkyism, that without more ado declares all state ownership, even of the Bismarckian sort, to be socialistic.”56

Nor does nationalization necessarily even mean the democratization of management. While workers at Venezuela’s state-owned Alcasa aluminum plants were able to elect their own bosses as part of an experiment in “co-management,” militant trade unionists at the PDVSA oil company complain that many of the old managers from the lockout are still on the job.57As a major player on the world market, PDVSA faces pressure to mirror the practices of its competitors—including maximizing profits. Nor would foreign multinationals with Venezuelan operations—like Ford or Chrysler—simply stand pat if workers’ control were legislated into being.

Reforms have been possible due to increases in oil revenue—but will this add up to revolution? The question remains as to whether, and how, this “socialism in distribution,” as Prashad put it, can be transformed into the direct rule of the working class. To assess this possibility, it’s necessary to review Venezuela’s economic policy.“Bolivarian” internationalism
Chávez’s Venezuela is often compared to Castro’s Cuba by supporters and enemies of both. The two countries have, of course, forged a close alliance via the oil-for-doctors arrangement and by jointly forging opposition to U.S. imperial aims in Latin America. Castro’s association with the Venezuelan “revolutionary process” has rehabilitated Cuba’s revolutionary credentials more than fifteen years after the collapse of the USSR forced the country into prolonged economic crisis and political isolation. In the last years, Castro has reemerged as the grand old man of the Latin American Left, an adviser to Chávez, Evo Morales in Bolívia, and Rafael Correa in Ecuador. Chávez’s attempts to form Bolivarian Circles (which never took off) recalls Cuba’s Committees for the Defense of the Revolution, and Chavez’s PSUV initiative invites comparisons to the merger of Castro’s July 26th Movement and other socialist organizations to eventually form the Cuban Communist Party.58

Making an alliance with Cuba, however, has not led Chávez to copy Castro’s bureaucratic state-capitalist economic model that was derived from Stalinism in the Soviet Union. That system could work as long as the Cuban economy was functioning as part of a large political and economic bloc dominated by Moscow; without that alliance, the country has been forced to reintroduce the market and private investment, deepening the inequalities that had already emerged under the “socialist” economy.59While there are Castroist elements around Chávez who favor a hard turn toward state capitalism, Venezuela is hardly likely, or willing, to move in this direction, writes Latin America analyst Hampden Macbeth:

Despite appearances to the contrary, Chávez and Castro differ on several critical ideological issues. Castro believes in traditional “real socialism,” in which the economy is controlled by the state and it exerts a strong influence over the economic affairs of its citizens and foreign trade. However, Chávez thinks “real socialism’s” time has passed, saying: “[w]e have to re-invent socialism. It can be the kind of socialism that we saw in the Soviet Union, but it will emerge as we develop new systems that are built on cooperation, not competition,” with this being seen as “new socialism.” One manner in which “new socialists” differentiate themselves from “real socialists” is that they are significantly more tolerant of private economic enterprise and considerably more experimental in the approaches they are willing to take to achieve their socialist goals. Evidence suggests that Latin America might be returning to its traditional “mixed economy” where an important role is assigned both to the public and private sectors.60

The Cuban-Venezuelan economic relationship is significant. Venezuela supplies Cuba with upwards of 90,000 barrels of oil per day at subsidized prices in return for the services of 20,000 doctors and other medical personnel. “The increase in daily oil imports allowed Castro in May of 2005 to double the minimum wage for 1.6 million workers, raise pensions for the elderly and deliver cooking appliances to poor Cubans.”61

Rather than mimic Cuba, the international focus of Chávez’s economic policy has been to (1) promote economic regionalism and greater integration of Latin American countries through trade internally and with non-U.S. partners; (2) organize alliances of hydrocarbon-producing countries, boosting OPEC and advocating the creation of a similar cartel for natural gas producers; and (3) wean Latin American countries away from the International Monetary Fund, the World Bank and U.S.-European finance through the creation of the Bank of the South. Chávez’s course reflects not a turn to economic autarky, or self-sufficiency seen in Third World nationalist governments of the past, but a pan-Latin American attempt at “sovereign insertion” into the world economy, to borrow the phrase of Brazil’s President Luis Inácio “Lula” da Silva. In fact, a flurry of Brazil-Venezuelan business deals ranging from oil and gas to infrastructure—Brazilian exports to Venezuela increased 60 percent in 2006—are at the heart of this change.62Lula’s friendly relations with George W. Bush and the U.S. are very different from Chávez’s anti-imperialist stance, but the aspirations of Brazilian capitalism coincide with those of Chávez insofar as regional integration creates more space for what is the world’s ninth-largest economy. The same point can be made about Argentina, which rode a commodities export boom out of the economic collapse of 2001. Today, Argentine President Néstor Kirchner, certainly no radical, finds it convenient to ally with Chávez to develop export markets and obtain cheap energy. By spring 2007, Venezuela had purchased $3 billion in Argentine government bonds, and the two governments jointly issued additional bonds worth $1.5 billion.63

Chávez’s international economic initiatives have had some important successes. With the U.S.-proposed Free Trade Area of the Americas (FTAA) dead in the water, Chávez has been able to flesh out his proposed Bolivarian Alternative for Latin America (ALBA), which to date groups Venezuela, Cuba, Bolivia, Nicaragua, Haiti, and, as an observer, Ecuador. Among the more important initiatives under the ALBA umbrella is the creation of PetroCaribe, in which PDVSA will offer oil at preferential prices to fourteen Caribbean nations, finance up to 40 percent of the purchases, allow twenty-five years for repayment, and bar U.S. oil companies from purchasing or distributing the oil.64

At the same time, however, Venezuela joined Mercosur, the South American trade bloc dominated by Brazil and Argentina. “Although Mercosur has recently taken on a more social focus with the addition of Venezuela, the recent economic accords signed with Cuba, and Castro’s offer to share the Cuban social and educational experiences with the rest of the countries, the trading bloc is still essentially economic and built on the neo-liberal tendencies on which is was founded,” writes journalist Michael Fox. “Nor does Venezuela’s entry in to the 15-year-old bloc appear to be based on the ALBA tenets of cooperation and solidarity, but rather the complete elimination of tariffs on all imported and exported goods, including ‘sensitive products’ by 2014.”65In other words, Chávez is attempting to derail the FTAA by collaborating in a free-trade area for South America independently of the United States. (The U.S., meanwhile, has had to lower its expectations and seek individual free-trade deals with Colombia, Peru, and Panama).66

Oil diplomacy has opened doors for Venezuela even where the U.S. has far greater influence—for example, in Chile under moderate socialist Michelle Bachelet, whose government has continued neoliberal policies and lined up behind Washington. Shortly after Venezuela nationalized the foreign oil company holdings in the Orinoco region, the government signed a deal with Chile’s state oil company to allow it a stake in operations there.67

Seeking alternatives to trade with the U.S.—to which Venezuela exports 60 percent of its oil—is another key element of Chávez’s policy. A $335 million gas pipeline will link Colombia’s natural gas fields to Venezuela’s refineries, to the consternation of Washington. Beyond Latin America, Venezuela in 2006 exported 150,000 barrels of oil per day to China, a tenfold increase since 2004, and China has a $2 billion investment in oilfield development and another $9 billion in infrastructure. Iran and Venezuela are developing oil refineries in Indonesia, Syria, and Venezuela. India plans to purchase two million barrels per month from Venezuela.68This integration among Latin American economies and “South-South” economic agreements is a departure for the region.

Chávez’s economic initiatives with potentially the greatest impact are efforts to influence hydrocarbon politics in Bolivia and Ecuador, where left-wing parties won office after years of popular mobilizations against a succession of neoliberal governments. The objective is an alliance of South American energy producers that could offer discounts and barter deals to its neighbors while maximizing revenues from exports to the U.S. and Europe.69

To finance this integration and new economic development, Venezuela is working with Argentina, Brazil, Bolivia, Ecuador, and Paraguay to launch the Bank of the South. Already, Chávez is “squeezing the International Monetary Fund out of Latin America, the region that once accounted for most of its business,” Bloomberg reported. IMF lending in the region has fallen to 1 percent of its portfolio, compared to 80 percent in 2005, while Venezuela had, by March 2007, loaned or offered $4.5 billion to Argentina, Bolivia, and Ecuador, and had $34 billion in reserves.70

Chávez has also called for debt forgiveness by the IMF to reduce pressure on Third World countries. In fact, Venezuela had already tapped oil revenue to pay off its own debt of $3.3 billion to the IMF and the World Bank five years early on loans taken by previous corrupt governments.71The payout to the IMF has been criticized by the Venezuelan Left, and is a sign that Chávez’s policies are often far more moderate than his revolutionary rhetoric would suggest. What’s more, the Venezuela-Argentina joint proposal for the Bank of the South is “shocking” and “completely compatible with the neoliberal vision, the vision of the World Bank, the vision of the dominant economic thinking [and] the vision of the capitalist class regarding the reasons behind Latin America’s limitations,” argues Eric Toussaint, an anti-debt campaigner and author who served as a consultant to Ecuador’s government during negotiations to create the bank. “The general prescriptions specify the need to promote the formation of multinational corporations with regional capital, without specifying that they must be public.”72

Taken together, Venezuela’s international economic policy and its focus on Latin American integration point not toward international socialism, but the goal of the New International Economic Order proposed by the Argentine economist Raúl Prebisch in the early 1970s.73Among the key elements of this “developmentalist” economics was the creation of cartels of basic commodity producers to avoid the wild price swings that played out in boom-slump patterns in the developing world. It’s precisely this that Chávez has in mind in shoring up OPEC, creating a gas producers’ cartel, nationalizing key industries, creating a regional economic bloc, and expanding trade among countries of the Third World. The difference is that today’s attempts to alter the terms of world trade and finance take place after nearly thirty years of neoliberalism. While large sections of Latin American capital have suffered under the pressures of an opening to the world market and the loan sharks of the IMF and Western banks, their horizons are limited to trying to make neoliberalism work for them, rather than disproportionately suffer its consequences. The Argentine Marxist economist Claudio Katz calls this trend “neo-developmentalism.” “The turn is ‘neo’ and not fully developmentalist because it preserves restrictive monetary policy, fiscal adjustments, a priority on exports and the concentration of income,” he writes. “It seeks only to increase state subsidies to industry in order to reverse the consequences of extreme free trade.”74

It is on this point that Venezuela (as well as Bolivia and Ecuador) aspire to be different—to go beyond neo-developmentalism toward genuine social transformation by spreading the benefits of economic growth to the mass of the population. At issue is whether this will be successful, and whether it can build socialism of the twenty-first century.

Confronting capital?
It is oil, of course that gives a country of just under twenty-seven million people an outsized importance in the world economy, especially to the United States. Venezuela is the fifth-largest oil exporter in the world, and ranks in the top ten in reserves. Oil accounts for 80 percent of revenue from exports and around one-third of GDP.75The oil boom boosted GDP from $117.1 billion in 2000 to $140.2 billion in 2005.76 This oil wealth made it imperative for U.S. imperialism to use Venezuela as a counterweight to assertive nationalist governments in Mexico in the 1930s and Cuba in the 1960s. Little wonder that Nelson Rockefeller of Standard Oil formally ran U.S. policy in Venezuela during the Second World War and made Venezuela his second home.77 Any leader pressing for significant progressive change in Venezuela is therefore bound to step on Uncle Sam’s toes, and Chávez has done so repeatedly. But the heavy-handed U.S. response to Chávez has imparted an image of radicalism to his government that isn’t always warranted.

For example, Venezuela’s high-profile nationalizations of the telecommunications company and foreign oil holdings seem to echo the classic Third World development strategy of import-substitution industrialization—promoting state-owned companies and high trade barriers to stimulate domestic production. In fact, Chávez hasn’t pursued nationalization in nearly so radical manner, or on as wide a scale, as anti-imperialist governments in the developing world had pursued in the mid-twentieth century—for example, Egypt under Nasser.78Compensation paid for nationalized companies has been at more or less market rates, totaling $1.6 billion for Verizon’s share of CANTV.79

In fact, the private sector in Venezuela has benefited handsomely from the country’s oil-driven boom. “GDP growth of 17 percent in 2004, 11 percent in 2005 and 10 percent in 2006 speaks for itself,” observes one financial journalist.

Away from Chávez, his mouth and his oil, the Caracas financial community has been making serious money.… Venezuelan banks’ results that are the envy of the banking world, with returns on equity (RoE) of 33 percent the norm and 40 percent-plus RoE posted by pack leaders. International concerns are welcome to the party, too: Spain’s Banco Santander, which enjoys 15 percent of total market share, is a shining example.80

Business, aside from hydrocarbons and mining, isn’t particularly squeezed by high taxes. The highest corporate taxes are 34 percent, a typical figure internationally, except for income from petroleum-related companies, which pay 50 percent, and royalties for mining at 60 percent. The top income tax rate is 34 percent, about the same as the U.S. but without the additional charges the wealthy pay in the States.81Thus for all the talk of building socialism, the enormous wealth of Venezuela’s oligarchy remains essentially untouched. “Currently, the richest 20 percent of Venezuelans receives 53 percent of all income, while the poorest 20 percent accounts for only a 3 percent share of the country’s total income,” the World Bank reports.82 At the top of the heap is media mogul Gustavo Cisneros, worth an estimated $4 billion.83

In June, Chávez made it clear that the Bolivarian Revolution could exist with Venezuela’s elites. At a rally of hundreds of thousands in defense of his decision not to renew RCTV’s license, Chávez proclaimed, “We have no plan to eliminate the oligarchy, Venezuela’s bourgeoisie. We have demonstrated this sufficiently in our eight years.”84

Any serious attempt to make Venezuelan society more egalitarian—let alone socialist—would begin with a radically progressive tax system aimed at redistributing wealth. Yet after eight years in office, Chávez has only made his first moves in that direction, cutting the regressive value-added tax from 14 to 11 percent in March.85Following reelection, Chávez also spoke of a luxury tax on second homes, expensive cars, and art collections that would fund communal councils, but as of mid–2007 the plan had not been formalized.86

What’s more, the Venezuelan government has been unable to stop capital flight by the wealthy. According to one estimate, $66 billion was transferred out of the country between 1999 and 2005, compared to an inflation-adjusted $112 billion between 1950 and 1999.87Some of this takes place through legal loopholes; some is a tax dodge. One of the benefits of the CANTV nationalization is that it prevents Venezuelans from buying up shares of the company in the local currency, the bolívar, and selling them for dollars on Wall Street. However, currency traders continue to dump the bolívar in the markets, despite Venezuela’s rapid growth and large dollar reserves. This is a reflection of both the inflationary dynamic of the oil boom and capitalists’ fear of being expropriated.

There are grounds for such fears. Venezuela’s land reform program aims to draw urban slum dwellers into the countryside to till what is potentially some of the world’s most productive land. To achieve this the government is handing over state-owned holdings but also compelling absentee landlords and cattle farmers to sell for what they say are below-market prices. The result has been some of Venezuela’s sharpest class conflicts, with settlers and squatters meeting repression from landowners and their hired thugs and assassins.88The leading radical farmers’ group estimates that fifty Chavista activists in the land reform struggle were assassinated in the 2002–03 period.89

As intense as the struggle on the land has become, the Venezuelan government has shied away from a direct confrontation with big capital and the foreign multinationals. This has constrained the government’s ability to boost living standards of workers and the poor. The constant injection of oil revenue into the economy has fueled inflation to 20 percent officially, often higher in reality. This has encouraged speculators to hoard staple food items like sugar and chicken in anticipation of inevitable price increases. Since the government’s Mercal subsidized markets rely on private suppliers who sell at fixed low prices to distributors, they are themselves faced with shortages. They are often forced to buy items from street vendors that should be on the Mercal shelves, but at much higher prices.90

Added to this economic pressure on workers and the poor is an epidemic of murders and violent crime. Venezuela’s murder rate is five times that of the U.S., and is the third highest in Latin America after El Salvador and Colombia, two countries that have seen prolonged civil wars and institutionalized political violence. There were 9,402 homicides reported in 2005; in April of the following year a high profile kidnapping and murder of three boys and their driver in Caracas made the issue into a political debate. The Right seized upon the killings as an example of Chávez’s failure to guarantee law and order, and the opposition took to the streets in protests. Several police were implicated in the murders “confirming public distrust of police forces widely seen as corrupt, ineffective, and at times complicit in crime.”91To be sure, much of this crime is rooted in Venezuela’s rapid and prolonged economic decline in the 1980s and 1990s. But it also underscores the fact that even a red-hot economy and wide-ranging social reforms cannot substitute for the self-organization and shifts in consciousness that have curbed or reduced crime during revolutionary movements of the past.

The revolutionary process is inhibited by the state bureaucracy itself, as Chávez himself often says. Leftist militants speak of a “Bolivarian bourgeoisie” clustered around PDVSA, the heads of government ministries, state governors, mayors, and “pro-revolutionary” business types. The recent sale of PDVSA bonds gives some idea of how this stratum consolidates itself in class terms. An anti-Chávez business analyst claims that a recent $7.5 billion PDVSA bond issue attracted bids worth $15 billion. This, he claimed, allowed a relatively small number of people close to the government to purchase the bonds at list price through a limited number of institutions, and then quickly resell the bonds for a much higher price, netting $780 million, a figure that is 20 percent higher than Venezuela’s total financial profits for the 2004–06 period.92Even if these estimates are inflated by opposition figures, there’s no doubt that the enormous amounts of money flowing in and out of PDVSA inevitably binds company management and sections of the government closely to capital, however hostile individual capitalists may be to the Bolivarian project.

Even Hugo Chávez speaks of the dangers of bureaucracy and calls for “deepening the revolutionary process” towards socialism. What is not clear, however, is what role the Venezuelan working class will have in the “Bolivarian revolutionary process.”

State and revolution in Venezuela
The classical revolutionary Marxist approach to state and revolution is based on a theoretical analysis of the capitalist state and historical experience of workers’ power in successive epochs. In the Communist Manifesto, Marx and Engels stated that “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie,”93that is, the final arbiter of differences within the ruling class and a collective defender of the interests of capital, through what Lenin called “special bodies of armed men” who stand above society as a whole.94 The brief seizure of power by workers in the Paris Commune of 1871 prompted Marx and Engels to clarify their views on the state and social revolution: “One thing especially was proved by the Commune, viz., that ‘the working class cannot simply lay hold of ready-made state machinery, and wield it for its own purposes.’”95

In the Russian Revolution of 1917, Lenin generalized Marx’s theory. Lenin’s book State and Revolution pointed out that workers’ self-organization in the form of councils, or soviets, constituted an embryonic workers’ state. In order to reorganize society on a socialist basis, however, workers must smash the old state machine and, by wielding power directly, abolish the old state as a separate apparatus that guarantees the rule of a minority of exploiters. Writes Lenin: “It is no longer a state in the proper sense of the word; for the suppression of the minority of exploiters by the majority of the wage slaves of yesterday is comparatively so easy, simple and natural a task that it will entail far less bloodshed than the suppression of the risings of slaves, serfs or wage-laborers, and it will cost mankind far less.”96

How does this theoretical and practical framework apply in Chávez’s Venezuela, which seeks to create a revolutionary state?

The Chavista case can be summarized as follows: Chávez’s success in wresting control of PDVSA and nationalizing key companies has deprived the old state machine of its economic lifeblood. At the same time, the “explosion of popular power” in communal councils will dismantle the state bit by bit from below. Coops, land reforms, and co-management in workers’ councils are democratizing the economy. Thus the transition to socialism has begun via a prolonged revolutionary process. The phrase “revolutionary process” is borrowed from Castro’s Cuba, where, it is claimed, a revolutionary process is still underway half a century after the old regime was overthrown.

When used in this way, the term “revolutionary process” reflects a misunderstanding both in the nature of the capitalist state and the politics of social classes. The Russian revolutionary leader Leon Trotsky, whom Chávez has become fond of citing, pointed out that even the hostility of the bourgeoisie toward the reformist Popular Front government of Spain during the Civil War of 1930s didn’t change the class nature of the state; further, he argued that the struggle against the fascist army of General Francisco Franco had to be combined with the struggle against bourgeois rule itself:

It is necessary to think out the problem of the revolution to the end, to its ultimate concrete conclusions. It is necessary to adjust policy to the basic laws of the revolution, i.e., to the movement of the embattled classes and not the prejudices or fears of the superficial petty-bourgeois groups who call themselves “Popular” Fronts and every other kind of front. During revolution the line of least resistance is the line of greatest disaster.97

What is more, the question of revolutionary insurrection can’t simply be subsumed into a never-ending revolutionary process. While it is certainly true that working-class revolutions are the culmination of a long process of struggle and building organization, there must also be a decisive change in state power and class relations if the term “revolution” is to have any meaning.
The question of state power remains before the Venezuelan working class. The core of the capitalist state is the “separate body of armed men” that Marx described. The military is the most rigid and hierarchical of all capitalist institutions, reflecting the class divisions in their most concentrated form. However estranged the bourgeoisie may be from Chávez’s government, the top military brass remains socially intertwined with the oligarchy and shares its class interests. Reshuffling top officers, as Chávez did after the failed 2002 coup, can’t erase the class divisions in the military. Civilian reformers may be parachuted into key ministerial posts to carry out progressive government policies, but the military is by its nature relatively impermeable, with top officers climbing the ranks only after years of service.

The 2002 coup showed that Chávez’s own career in the armed forces and the presence of other former military figures in government was insufficient to prevent a coup. This isn’t a prediction of a new military coup. Rather, it is to point out that the core of the capitalist state remains entrenched despite the revolutionary process and therefore will ultimately, and necessarily, reflect the interests of capital. The armed forces will not simply convert themselves into democratic workers’ militias. It is telling that the so-called revolutionary state of Chávez’s Venezuela has not proposed soldiers’ councils—a key development in the Russian Revolution of 1917—still less the election of officers or co-management between the general staff and new recruits. The “federation of communal councils” that Chávez envisions will coexist with the military, in which the rank and file must unquestioningly follow officers’ orders or face severe consequences. Changing the official greeting in the military to “socialism, fatherland or death”—a variation on Castro’s slogan—doesn’t alter that fact. Those who aim to “deepen” the Venezuelan revolution must confront the reality of a military threat. Failure to do so runs the risk of a replay of the coup in Chile of 1973, when a military that was assumed to respect civilian control launched a campaign of savage repression.

Such a coup need not come in the form of a nakedly pro-imperialist power grab of the 2002 coup attempt. A military ouster of Chávez could instead be promoted as a means to maintain “order” in the wake of right-wing violence or mass strikes, or even as the best way to advance the revolution—Chavismo without Chávez. That in fact was the fate of General Velasco in Peru in 1975, who was ousted by officers who declared that they would “deepen and consolidate the process” of the revolution before turning decisively to the right.98While Venezuela spends only 1 percent of GDP on the armed forces, the rapid growth of the country’s economy has funded big spending increases—including $3 billion to modernize its forces with twenty-four fighter jets, fifty-three helicopters, and 100,000 AK-47 rifles from Russia.99 Such spending is seen as necessary in view of the threat from Washington, but it also builds up the military as an institution separate from the revolutionary state. Indeed while the 100,000 rifles are intended to provide a mass defense against a U.S. intervention, the guns are not distributed to workers and the poor, but remain under control of the armed forces.

While the Venezuelan capitalist state remains intact, it is also the case that Chávez continues to have enormous room to maneuver politically. The crisis of legitimacy of the old order, the debacle of U.S. imperialism in Iraq, sustained oil price increases, and pressure from the working class and the poor has propelled the most significant wave of reforms yet seen in the neoliberal era. Chávez remains the arbiter of Venezuelan politics, renewing his support in successive elections and forcing local and international capital to make concessions. To workers and the poor, Chávez appears as a bulwark against reaction, as seen in the failed coup and the oil lockout. To the bourgeoisie, Chávez is a contemptible upstart who should be overthrown at the first available opportunity—but is also someone who has so far diverted social struggles way from an all-out attack on capitalist private property. To the capitalist class, a Chávez government is a lesser evil than a mass uprising of the sort provoked by the 2002 coup. Thus, the opposition is biding its time, using periodic provocations to test Chávez’s level of support.

The Venezuelan president, however, is adept at turning the Right’s interventions into opportunities to ratify his leadership before a mass base, from the 2002 coup and oil lockout to the rioting in May 2007 by middle-class youths over the revocation of RCTV’s broadcast license. What’s more, the frequency of elections and periodic massive mobilizations in Caracas impart a kind of plebiscitary character to Chávez’s leadership, constantly posing the question: Are you with me or against me? In addition to local, regional, and National Assembly victories by his supporters, Chávez has won the 1998 presidential election, reelection under a new constitution in 2000, defeated a recall election in 2004, and he prevailed in the presidential reelection campaign of 2006. In this last contest, the outcome was never in doubt, so the race became about reaching a self-imposed goal of obtaining ten million votes to demonstrate Chávez’s mass support.100

While the Right couldn’t muster a credible electoral challenge, Chávez threw down another gauntlet that the opposition couldn’t refuse to pick up: the revoking of RCTV’s broadcast license. The Right, reeling from defeat at the ballot box, suddenly could play on its own turf, posing as brave defenders of the free press against an increasingly authoritarian military caudillo. When the Right inevitably stirred up violence by middle-class youth, Chávez seized the opportunity to call for a mobilization of two million to protest against the “destabilization campaign.”

To make this point is not to downplay the threat from the Venezuelan Right and U.S. imperialism. The threat of plots, coups, assassinations, and sabotage are all too real when a government defies Washington, especially one smack in the middle of the “backyard” of the United States. The issue here is the way in which Chávez repeatedly casts himself as the political arbiter by posing the for-me-or-against-me question. And with the PSUV, the question is now being posed within the revolutionary process itself. The proposal was justified by his supporters as a means to force the hand of opportunistic parties that had won National Assembly seats and government posts by tying themselves to Chávez’s coattails. But when Ramón Martínez, the governor of the state of Sucre, a member of the center-left Podemos Party—a coalition partner of Chávez’s MVR—criticized the proposal, Chávez called him a “counterrevolutionary” and a “coward,” adding, “Find your place, I don’t consider you with us, I consider you against us!” He made the same threat to the governor of the state of Aragaua, Didalco Bolívar.101Certainly Podemos is hated by many on the left—Didalco Bolívar ordered a police attack on workers at Sanitarios Maracay. But by adopting such a harsh tone, Chávez seemed to be sending an all-or-nothing message to his supporters generally: be with me 100 percent or join the opposition.

These problems don’t negate the role Chávez has played in initiating far-reaching social reforms and standing up to Washington. But it must be said that his all-or-nothing demand for support undermines both efforts—and certainly does not bode well for the attempt to build socialism in the twenty-first century.

Chávez has become a symbol of opposition to U.S. imperialism and the rebellion against neoliberal capitalism in Latin America. Because of this he has justifiably won the support of the great majority of workers and the poor as well as the Left. He has further periodically called on the Left to mobilize against corruption and inefficiency in government. Now matters have become less clear-cut. If the PSUV becomes an attempt to corral and contain the social movements and the Left, then the Left will be compelled to develop a much more critical stance. If proposed workers’ councils turn into instruments of state control over the working class and/or a replacement for the unions, organized labor will have to mobilize against it. If the government continues to leave capitalist property and wealth largely intact, workers and the poor will need to carry out the struggle themselves. The heart of the matter is whether deepening the revolution means democratizing political structures as an end in itself, or infusing it with a much greater social content than it has had so far.

How then to take the struggle forward? One could do worse than to take Chávez’s advice and read Trotsky’s “transitional program” for socialist revolution. Although written in 1938 for a context that no longer applies—victorious fascism and looming world war—Trotsky’s formulations are apropos in view of Venezuela’s stated aim of giving workers greater control over production. “No office-holder of the bourgeois state is in a position to carry out this work, no matter how great the authority one would wish to bestow on him…” Trotsky wrote. “To break the resistance of the exploiters, the mass pressure of the proletariat is necessary. Only factory committees can bring about real control of production, calling in—as consultants but not as ‘technocrats’—specialists sincerely devoted to the people.”102

Trotsky further argued that as a transitional demand toward the expropriation of the capitalist class, workers should call for the “expropriation of several key branches of industry vital for national existence or of the most parasitic group of the bourgeoisie.”

The difference between these demands and the muddleheaded reformist slogan of “nationalization” lies in the following: (1) We reject indemnification; (2) we warn the masses against demagogues of the People’s Front who, giving lip service to nationalization, remain in reality agents of capital; (3) we call upon the masses to rely only upon their own revolutionary strength; (4) we link up the question of expropriation with that of seizure of power by the workers and farmers.103

Trotsky’s method is clear enough: Start with the promises and programs of liberal and social-democratic governments, and impart to them a working-class content aimed at raising the level of class-consciousness, organization, and struggle.
To be sure, Chávez’s anti-imperialist politics play a progressive role on the world stage, compared to the reformist Popular Front governments in 1930s Europe that derailed the revolutionary possibilities. Nevertheless, Trotsky’s approach provides a useful framework: Stand with Chávez against the oligarchy and U.S. imperialism, but be willing to go beyond the limits set by government policy and confront capital; defend Chávez’s reforms, but refuse to compromise the political independence of the working class.
The months and years ahead in Venezuela and the rest of Latin America promise to be stormy—but also hold out the possibility for rebuilding the revolutionary Left internationally. The struggle for socialism in Venezuela has already broadened the horizons and raised the aspirations of the Left internationally. The future of that struggle will shape the debates and perspectives for the Left for a long time to come. It’s crucial for socialists internationally—especially in the U.S.—to engage with the revolutionary movement in Venezuela and offer our fullest solidarity.